News/ Press
Southeast U.S. Gas Markets in Quandary over Future Supplies,
Zeus Development, Savannah Conference to Examine Alternatives
October 11, 2005, Houston - With Florida Power and Light's withdrawal
of its tender for Bahamian LNG and strident opposition to new terminal
construction along the U.S. Atlantic and eastern Gulf coasts, Southeastern
gas markets are scrambling to secure supplies.
The region consumes some 7.0 billion cubic feet of gas daily (Bcfd),
more than the output of any LNG export plant worldwide, and with
demand for electric power soaring, consumption is expected to reach
12 Bcfd by 2015.
"The Southeast is in a pinch," said Bob Nimocks, president
of Zeus Development Corporation, an energy research company and
organizer of the Savannah conference. "The region enjoys strong
economic growth, but many of its largest consumers are downstream
of pipeline bottlenecks where seasonal demand for gas-fired power
poses significant challenges."
"Now, with the setbacks in prospective supplies from the Bahamas
and plans for Alabama, Florida or Carolinian terminals thwarted,
questions arise as to whether sufficient new gas will be available
to keep prices in check. The shortfall will have implications as
far west as Louisiana and as far north as Maryland."
El Paso, the owners of the Southeast's only LNG terminal at Elba
Island, has been expanding capacity rapidly to fill the void. The
terminal's outputs will double to 0.8 Bcfd early next year. But,
this increase is less than 10% of the expected growth by 2015. Future
expansions are limited due to narrow access through the Savannah
River.
The nearest new capacity is proposed at new terminals in Pascagoula,
Miss., and the existing one at Cove Point, Maryland. But, Pascagoula
was ravaged by Hurricane Katrina and Cove Point gas is demanded
by Northeast markets. Meanwhile, gas producers onshore Louisiana
and Texas and federal waters in the Gulf of Mexico are struggling
to maintain the current levels of flow.
From where will future supplies come? Should the region switch to
coal or nuclear to satisfy demand?
Speakers from several major suppliers, including BG, Chevron, Williams
and El Paso, as well as noted energy industry analysts from McKinsey
& Company have been asked to address these questions, Nov. 16-18
at the Savannah Convention Center.
For more information, access www.lngexpress.com/SELNG
or contact
, 713-333-5773.
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